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Forex Flash: EUR/USD vulnerable to a bigger correction - RBS

After the deep EUR/USD pullback off highs, "a further decline in coming weeks leading into the Italian election and to reverse its little blowout above 1.35 appears more likely near term" says Greg Gibbs, currency strategist at RBS.

Greg adds: "EUR/USD is hovering just above 1.35, a level that appeared to trigger significant stop loss buying last week. This suggests there is likely to be stop losses below that level. EUR can fall several big figures and still appear in a rising trend from its lows in July. As such it feels vulnerable to a bigger correction just on uncertainty over coming weeks into the Italian election."

Forex: EUR/USD dealing with fresh lows around 1.35

EUR/USD is currently dealing with fresh 3-day lows, last at 1.3498, following a double intraday low at 1.3490, previous roof of the channel from Dec 19 highs to Jan 14 highs, broken higher past Tuesday Jan 29. Moments before key risk event for the session in the form of RBA meeting, local share markets are all showing loses, following the -1.15% in SP500 at NY close, and big loses in Europe, with Spanish Ibex35 down by -3.61%.
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